MedPro Blog

401(k) Plans Explained for Foreign-Educated Healthcare Professionals

A 401(k) retirement savings plan is a benefit that MedPro Healthcare Staffing offers its foreign-trained healthcare professionals. However, if you have never had a 401(k) plan before or have not read about it in the past, it can be a little difficult to understand. At times, it may even seem overwhelming.

Essentially, a 401(k) allows for you to take out a certain percentage of your paycheck to invest. You get to control how your money is invested and whether you want to put it in stocks, bonds, or money market investments.

What is the benefit of a 401(k)?

One major benefit is having this lower taxable income for the year. The money you put into your 401(k) will not be taxed when you go to file your taxes for the year. Which means if you put away $5,000 in one year, and your salary is $50,000, then only $45,000 is taxed.

Another major benefit is the chance to make a higher rate of return on your savings. If you put away $5,000 a 401(k) plan, you get to invest it and potentially make a much higher amount of money than if you just left it in a savings account. While there is a little more risk involved, the return is also better.

If you are not looking to so high-risk investments (like putting money into the stock market), you can choose to invest your money into bonds, which are low-risk investments. However, these have a lower rate of return.

What does it mean when a 401(k) contribution is matched?

Some employers offer its employees a company match when they choose to invest in a 401(k) plan. For example, if a company offers to match 1% of the money you put into the account, then if you put in $500 per month, your company will give you $5 to add to the account. This way, you are actually earning more money thanks to your company and makes you have a higher amount of savings than if you were just putting it in the bank.

Does it cost me any money?

Not at all! The 401(k) plan is free for MedPro’s foreign-trained nurses, medical technologists, and therapists. All you have to do is opt-in when you are eligible, and choose how much you would like to put away from your check per pay period.

The bottom line

401(k) plans are great options for people looking to put money aside while they are working in order to help save for retirement. If you want to retire when you are older and have funds for travel, living expenses, and other goods or services, the money you put away can help you. Your future self will thank you!

Are you looking to start a new career and life in the U.S.? You can start by applying here.